The Biggest Transparency Story of 2015

October 8, 2014

Most Americans take it for granted that their state and city governments should reveal how they are spending tax dollars. Many states and cities meet this expectation by putting information about budgets and spending  online. But oddly, one of the fastest growing areas of local government spending is usually hidden from public view, and is often effectively hidden from state legislators. In New York State, state business tax credits have tripled in the last decade to $1.7 billion each year, and this does not include credits provided by local governments. Watchdog groups are enormously concerned about this secretive spending and the risk of corruption and pay-to-play.

The good news here is that this shadow spending may be getting a massive dose of sunlight. In a move with huge implications for local government transparency, the obscure but very powerful Government Accounting Standards Board (GASB) is inching towards new rules that will require that states and local governments disclose the cost of all “tax abatements” starting after December 15, 2015. Under GASB’s definition, this would include business tax credits and economic development subsidies.

According to the national subsidy watchdog group, Good Jobs First, GASB will have a three month comment period on the new policy starting in November 2014. Good Jobs says it appears that GASB will propose giving governments the option of disclosing individual deals or overall program costs. Transparency advocates should be asking GASB to mandate the most specific possible reporting on individual deals. Disclosing overall program costs is not particularly informative or useful, and will allow states to spend billions without identifying who the beneficiaries are or what they have done with their subsidies.



Testimony for City Council Committee on Economic Development

October 7, 2014

Last Thursday, October 2,  the New York City Council Committee on Economic Development held an oversight hearing on “Evaluating the Effectiveness of Tax Incentives Offered by the New York City Economic Development Corporation.”

Reinvent Albany provided testimony, along with ALIGN, Good Jobs New York, New York Lawyers for the Public Interest and South Bronx Unite. A brief write-up of the hearing can be found on GJNY’s website.

Below is Reinvent Albany’s testimony:

Increasing EDC and NYC IDA Online Transparency

Recommendations for the Economic Development Committee Oversight Hearing

October 2, 2014

Prudence KatzePolicy Coordinator, Reinvent Albany

Good afternoon, my name is Prudence Katze and I am the Policy Coordinator for Reinvent Albany, which co-chairs the New York City Transparency Working Group.

Thanks to the tenacity of Good Jobs New York and other advocates, the EDC has made major strides towards making its activities more transparent. However, the overall goal is to make it as easy as possible for the public and City Council to see what the EDC and IDA are doing with public property and funds. A clear and transparent process allows us to better understand how well EDC subsidies are working, and ensure that investments are not at risk for corruption.

We have four basic requests for improving EDC Online transparency:

1.  Create a unified database of “deals” facilitated by the EDC and the IDA which includes all forms of subsidies to a business or project.

It is still murky how subsidies are distributed and to what entities they go to. EDC needs to create a single database which includes all forms of subsidies provided by the EDC and the IDA and is downloadable in a CSV, or other machine-readable, format. This database should have a bottom line total subsidy value which includes, the full market value of land sales and land leases, discretionary funding distribution, tax-abatements, and other financial incentives. Currently, some of this information is published online in separate spreadsheets, and some information, like operating subsidies, are not publicly viewable at all.

2.  Fully share EDC and IDA data with NYC Comptrollers Checkbook NYC website.

We commend the EDC for the initial step of sharing its data with the Comptroller’s Checkbook NYC site. However, we would also like to see IDA data represented, as well. Checkbook NYC is an important repository because it is equipped with an API which allows data to stream immediately into websites maintained by watchdog groups. We would also like to see the actual vendor names in Checkbook NYC to which payments and contracts are made to. As of today, there are 387 spending transactions listed under the EDC section of Checkbook NYC, and 198 are under “To Be Announced.” That means that offer half of the vendors are anonymous.

3.  Release EDC and IDA data on NYC’s Open Data Portal

Real Estate listings, Economic Snapshot data, and other tabular data available in a spreadsheet form should be published on the city’s Open Data Portal to ensure its maximum availability and use.

4.  Webcast EDC Board Meetings as the IDA started doing as of this year

We believe that a culture of transparency is best fostered by example on the leadership level. We request that EDC board and committee meetings be webcast live and archived for later viewing. As of this year, the IDA started to webcast and archive their board meetings, while the EDC meetings are currently only archived via .pdf meeting minutes.

Money in Politics in NY: Sep. 26 Edition

September 26, 2014

Political Corruption Not Unique to Albany, FBI Director Says

On a recent visit to his agency’s Albany field office, FBI Director James Comey said he doesn’t believe that official misconduct is a bigger problem in New York than in other states. The fact that the FBI is doing “lots of public corruption work” in “lots of state capitals,” he continued, shows ethics issues are not unique to Albany. On the other hand, State Integrity Investigation’s corruption risk rankings place New York among the worst states in the country. Certain candidates, like Anndrea Starzak who is challenging Senator Thomas Libous for his seat in the 52nd Senate District, are making public corruption a centerpiece of their campaign platforms. Starzak has campaigned on ethics reform, noting that Albany has seen 26 State legislators leave office due to criminal or ethical misconduct since 1999.

TV Ad Spending Floods New York Airwaves

A study conducted by the Center for Public Integrity and Kantar Media/CMAG estimates that candidates running for statewide office have spent $14.5 million in political ads so far this year. The vast majority of that money has been spent on the race for governor, and most of it by Andrew Cuomo. Despite the high level of spending already recorded this cycle, Cuomo reportedly still has $26 million on hand for the general election against Rob Astorino, which is more than the total he spent during his entire 2010 campaign. If past elections are any indication of what is to come, ad spending will spike just before the election in November, meaning that New Yorkers can anticipate even more political ads than normal this fall on TV as well as radio.

Groups Ask Comptroller DiNapoli to Scrutinize Business Tax Credits

September 24, 2014

Reinvent Albany and seven other transparency and fiscal watchdog groups wrote NY State Comptroller Tom DiNapoli and asked him to increase his scrutiny of the state’s $1.7B in business tax credits. The groups expressed concern about the lack of transparency around how some credits are granted, for instance, the identify of the recipients of $420m in Film/TV credits is secret. They also cited transparency concerns raised in the authoritative  2013 report on business tax credits by the governor’s tax commission led by Peter J. Solomon and Carl McCall. Of particular concern to the groups are discretionary credits like Brownfields, Film/TV and Empire Zones, which involve an application and rating process that is completely opaque to the public.

Groups to DiNapoli Tax Credits 9.8.14

Port Authority to Revise Freedom of Information Code

September 18, 2014

At its September 17, 2014 meeting, the Port Authority board of directors voted to create a new Freedom of Information Code matching either New York or New Jersey and creating a novel, two-tiered, appeal process consisting of a Review Board and third party “dispute resolution provider.” We hope the Port asks for public comment before voting on the final policy.

RESOLVED, that the Secretary of the Port Authority, with the assistance of
the General Counsel of the Port Authority, is directed to prepare a revised Freedom of
Information Code for consideration by the Board, at its October 22, 2014 meeting,
that would (i) provide for the disclosure of Port Authority records to the same extent
that comparable records would be disclosable by either the State of New York or the
State of New Jersey under their respective freedom of information and privacy laws;
and (ii) create a two-tiered appeals process that would be available to any person who
is denied access to a record of the Port Authority, consisting in the first instance of
the consideration of such matter by a Freedom of Information Review Board to be
established within the agency, to be followed, if necessary, with a binding
independent arbitration process to be conducted by a neutral, third party alternative
dispute resolution provider.

(This excerpt can be found on page 24 of the pdf downloadable at the embedded link above.)